Mr BALDWIN (Paterson) (17:32): I am responding to the report of the inquiry into allegations of inappropriate vetting practices in the Defence Security Authority and related matters by the Inspector-General of Intelligence and Security on behalf of the shadow minister, the member for Fadden, as he has had to take leave to attend a regal function on behalf of the opposition.

I would first like to thank the Minister for Defence for providing this House with an update on what was and remains a very serious lapse in Defence's security-vetting practices and for providing the opposition with a chance to respond. I also thank the Minister for Defence for presenting the report of the Inspector-General of Intelligence and Security into this matter, although I profess a certain level of curiosity as to why the Minister for Defence is responding and presenting this report when it was the Prime Minister who referred the original allegations to the Inspector-General of Intelligence and Security for investigation.

Naturally, the opposition will require time to fully avail itself of the details of this important report before making any statement as to the recommendations contained therein. However, I am heartened by Defence's assurances that it will readily adopt all 13 recommendations laid out in the inspector-general's report. Having said that, I remain concerned that the report, at least at face value, appears to acknowledge that there is a problem but that it is unable to identify specifically which Defence or ASIO personnel have been incorrectly vetted. I certainly appreciate the sensitivity of this issue and can only ask the minister to ensure that the private briefing the opposition will receive on this matter in the near future fully explores this specific issue.

The minister has briefly canvassed the events that led up to this wholly unsatisfactory situation. However, it is certainly instructive to recap some of the issues in a little more detail in an attempt to fully tease out the circumstances that gave rise to this sorry saga whereby thousands of security clearances were not conducted in line with existent policy.

As many will recall, this issue was made public in May last year when the ABC's Lateline program interviewed three former Defence Security Authority contractors who said, and I quote from the Lateline program:

… security at Australian military bases and embassies has been significantly compromised by a deliberate fabrication of information to fast-track security clearances.

The three former Defence workers say they were given direct instructions by senior Defence staff to fabricate security checks on civilian and military personnel.

As it turns out, the inspector-general's report confirms what the Defence contractors told the Lateline program. In fact, as the minister has pointed out, it confirms that the use of workarounds and other such malpractices was indeed widespread within DSA. Worryingly, the report also found that problems within DSA went beyond the initial scope of the problem raised by the former Defence contractors on Lateline. It concluded that both DSA and ASIO data had been compromised and that, more worryingly, problems persist today, some nine months after the problem was first made public.

The problems identified in the report include poor personnel management, poor record keeping, a lack of quality assurance, inadequate training for staff, poor IT systems and, most critically and tellingly, sustained pressure on staff for output. To put this critical point another way, there were not enough staff to do what was asked of them. There were not enough staff to do what the government asked of them when in 2010 Labor transformed DSA, which at that stage looked after Defence personnel security rating, into the Australian Government Security Vetting Agency, which is now responsible for whole-of-government personnel security vetting. To put this into context, the number of clearances the agency is required to process a year has more than doubled from 23,000 to approximately 48,000. This represents a substantial increase in the workload of the AGSVA. It is a workload that at the original staffing level was unmanageable, something that was only compounded by the move to a whole-of-government vetting model.

What strikes me as particularly unusual, or perhaps unusual in the context of this Labor government, is that those opposite concluded that they could substantially increase the workload of an organisation without increasing the human capital required to complete the set tasks. It is symptomatic of this Labor government to be so short-sighted. Again, we find ourselves in a very difficult situation—this time affecting the very core of government: national security. Of course we find this report recommending, amongst other things, that more people are required in order to manage an increased workload and associated output pressures. My question to the minister is a simple one: why has it taken yet another report to tell the government what any sensible department or corporate human resources manager would tell you in a heartbeat—that more work requires more staff?

While I again thank the minister for his statement, I nonetheless take exception to the minister's comments that the issues surrounding this matter were first brought to the government's attention on 16 May 2011, on the evening of the Lateline review. I would like to remind the minister that, as my colleague Senator Johnston made quite clear during the October 2011 foreign affairs, defence and trade estimates hearings, members of the Labor government had been alerted to the problems in the DSA some months before the Lateline program in question aired. Senator Johnston said:

I have seen some of the correspondence that they have raised and some of the reports they made to some people who were employed to report on their complaints back in May, June and July 2010. I will come back to those reports in a minute, but the four parliamentarians were the former member for Forde, Mr Raguse; Minister Snowdon; Minister Griffin; and Minister Emerson. They were all given firsthand information about these problems back in 2010.

One would think that such serious allegations would be immediately passed from these Labor MPs, one of them a cabinet minister, to the defence minister. But, no, they failed to pass on this information to the minister or even to the defence department. Instead, the problem festered until the story became public some 12 months after Labor MPs were told of the serious problems in DSA. I am aware that the minister may like to argue that the concerns communicated to the four Labor MPs related to bullying, harassment and maladministration within the DSA. I simply say in response that a responsible government would surely examine these issues in detail. A responsible government would not blindfold itself to the possibility of systemic issues affecting the administration and functionality of the DSA, particularly as work pressures within the organisation were well known at the time. Furthermore, the Trent Brennan report of 2010 highlighted such issues as well. Nothing seems to compel this Labor government to take action unless it first appears on our TV screens.

I am sure the Inspector-General's report will make for sober reading. Indeed, from a cursory examination of the findings we are now aware of the general extent of the problem, although I reiterate that we do not know the precise details of which personnel were not subject to the proper vetting practice. This has led to a situation, as the minister has stated, whereby at least 5,500 applications will need to be re-vetted, of which only 3,100 have so far been completed. I currently appreciate Defence's commitment to allocate additional resources to this problem, both presently and during the period preceding the release of the Inspector-General's report.

In conclusion, I would simply urge the minister to take stock of the report's findings and to ensure that the matters of national security do not fall prey to the increasingly indiscriminate Defence Strategic Reform Program budget cuts. Australia's national security is too important to not be adequately funded. A lack of funding and personnel seems to lie at the very core of this serious lapse in national security administration.